APAC data centre supply to fall short by up to 25GW by 2028

This is despite supply being expected to double over the next three years.

Despite an expected doubling of Asia Pacific data centre supply in the next three years, there will still be a shortage of 15 – 25 gigawatts by 2028, due to insufficient power supply and a lack of AI-ready data centres, according to CBRE’s latest research report.

While the surge in artificial intelligence (AI) adoption and the increasing demand for cloud services are notably boosting data centre requirements across Asia Pacific, not all existing and upcoming data centres in the region are equipped to handle AI workloads.

Here's more from CBRE:

AI-focused data centres demand more than double the power density per server rack compared to traditional facilities. This necessitates advanced infrastructure for cooling systems, floor loading capacity, and sensitivity to network latency and bandwidth. With many current data centre projects designed before the AI era, Asia Pacific is poised for a shortage of AI-ready space in the near future.

Despite these challenges, data centre investment remains strong. According to MSCI and CBRE Research, direct investment volumes reached US$4.7 billion in 2024, with robust activity continuing into early 2025 as operators and developers explore repurposing stabilised assets. Even with inadequate power supply, prolonged construction delays, and community opposition, land investments are on the rise.

“To capitalise on the growth in AI workload, investors should focus on more advanced data centre assets,” said Tom Fillmore, Executive Director, Data Centres, Capital Markets, Asia Pacific for CBRE. “Prioritising mergers and acquisitions, as well as equity investments in operators with a strong development pipeline will be key to achieving scalability, especially for projects that are power-ready.”

The robust fundamentals of the data centre sector are expected to present ample investment opportunities, whether through direct acquisition, new development, joint venture partnerships, or platform investments. Newer, more advanced assets are anticipated to see increased investment demand, leading to steady price appreciation.

“The AI boom and need for cloud services will continue to drive robust demand for both co-location and hyperscale data centres in Asia Pacific in the foreseeable future, attracting significant investor interest,”  added Ada Choi, Head of Research, Asia Pacific for CBRE. “Developed markets like Japan, Australia and Korea will see heightened demand, with Singapore also attracting attention despite its supply limitations.”